Last week's Billboard FutureSound conference in Ssan Francisco offered a variety of keynote speakers including a venture capitalist, a record label chief, an agency innovator and an EDM star. The keynote summary:
While companies like Spotify, Songkick and Deezer have recently made news for raising capital, Union Square Ventures remains cautious about investing in the digital music Sector because of the financial risks with the start-up costs: âit takes $5-10 Million in upfront costs before you even know what you've got."
Using Turntable.fm as a case study, Wilson explained that the start-up offered a unique product, which resulted in a successful global launch. The company made a strategic decision to focus on the US market as the cost and difficulty of licensing globally proved too challenging to take on at once.
On Soundcloud: âIâm on the board for Soundcloud and I really like Soundcloud because a lot of music that isnât licensed is on there like DJâs, mixes , mash-upsâ¦â âYou used to go on MySpace and see an artistâs top 2 or 3 tracks. Now I do that with Soundcloud.â âThe creativity that exists on Soundcloud is great, but the rights issues with mixes need to be worked out with the music industry.â
On monetization of music services: Successful music services can benefit with the âredistribution of the advertising dollars from radioâ. âAdvertising can carry a lot of the load, but not all of the load.â
On Apple: âiTunes is a 10 year oldish product and they havenât really moved away from a file based model to a streaming modelâ. Describing Apple as no longer a leader, bur rather a follower in the music industry, Wilson reminded the audience that Apple is a software company first with their strategic goals focused on selling a controlled or physical product rather than music.
The 3 things a Start-Up needs to have for his VC investment:
- âI want to see a founder or a founding team that brings something special to the team.â
- âI want to see a product that isnât copycat; its distinctly unique.â
- âWe want to see some demonstration that users love itâ
Keeping with the theme of innovation, Don shone a positive light on the opportunities available to being innovative in a position of what many â including Don â may describe as a forgotten or outdated record label.
âYou gotta continue to be the greatest traditional jazz record label.â âThe expectation of Blue Note is that nobody is counting on us to come up with the next Katy Perryâ stated Was.
On Change, Tech, and Innovation: âOur overall attitude is weâre open to everything. We understand that weâre no longer in the business of selling compact discs to everyone.
On music platforms and compensation of artists: âEven though I worked at a record company, I still value the contribution of an artist above all elseâ. Relating to the financial issues of start-ups he offered; âIf you build a system on the backs of an artist, when that system is built you have to pay them.â
On Blue Noteâs Spotify App and the sense of discovery: Don revealed that the average time spent on Blue Noteâs revolutionary Spotify App is 2.5 hours while the average Spotify app sees 5 minutes per user. âIts mysterious to me how they did this. The way it flows, you really get the feel of going through a bin of vinyl recordsâ âthatâs really the sense of discovery.â
On the band of the future: âA guy that can sing, a guy that can write sheet music, and a guy that can create apps. Thatâs the band of the future.â
Wiliam Morris Endeavorâs Marc Geigerâs keynote conversation with Bill Werde woke up the audience on Day 2 of the conference
On tech: Geiger labeled YouTube as âthe channel of the futureâ in both its effectiveness and proven track record of compensating artists. Later in the interview he responded âI fucking hope soâ when asked if he hoped that Google would eventually acquire his platforms of choice like Spotify, Pandora and favored app Songza.
On the business: The music industry has changed in recent years as radio and retail lost control as tastemakers for music. Music by artists like Adele wouldnât have been acknowledged by the music industry ears ago, but have made some of the biggest waves today.
On the lack of innovation: âNobody is leading in the entertainment business, itâs a bummer.â âWeâre in this boring middle period where weâre waiting for one of the giantsâ to jump in to and do something revolutionary. âIâm (also) surprised that there arenât more young innovators outside of Silicon Valley.â
On Live Nation: Despite statements about Live Nationâs past, Geiger sees a good future for Live Nation. âTheyâve had 5 major changes in managementâ âYou canât just swallow Ticketmasterâ¦at one point they had something like 20 lawsuits against them. Youâre going to build a company when youâre in court?â âTheyâre having a good concert yearâ¦they will emerge strong.â
On EDM: Providing examples of artists like The Chemical Brothers and the genre of trip-hop, Geiger explained that EDM âElectronic Dance Musicâ is not an overnight sensation. âI started buying shows in â88â¦it was a 25 year instant revolutionâ
Deadmau5 (aka Joel Zimmerman) Interviewed by Bill Werde
Echoing Marc Geiger, Deadmau5 explained to the audience that EDM, or as he calls it âEvent Driven Marketingâ has been around for longer than people credit it for. Although it is âno longer guys renting a field from a farmerâ, todayâs success of EDM is a âself fulfilling hype prophecyâ.
Zimmerman referenced Forbes to demonstrate how the media hype without any educated insight has driven the success of EDM; âForbes just decides to be cool for a minute and list the 20 top money making things with Tiesto #1 with $23 millionâ. âNobody is making that kind of money. Maybe gross yesâ Elaborating on the commissions and additional costs involved, inaccuracies such as hype lists signal that something is âhotâ and keep driving the hype forward.
Later referencing his comments about his earnings, Deadmau5 stopped the interview to poke fun at his manager for âtaking 20%â of the fresh coffee he had been delivered to him on stage.
On piracy: âI donât care about some kid sending a zip file of my entire catalog; awareness is key. What are you going to do, pirate me to the stage?â
On record labels: âDonât mail your demo to Interscope (or others) because they donât give a crap.â
On live shows: Discussing the desire for corporations to be attached to EDM events, he was confident that events will stay true to what the audience rather than a sponsor wants. âWeâre not having festivals for sheepâ¦.people arenât stupid.â âCorporate can ruin a lot of things, but they canât ruin performance arts.â
On Social Media: Zimmerman felt artists who were not genuine online or hire someone to manage Social Media are âlazyâ. âHow hard is it to send a Tweet?â he asked rhetorically. Backing up slightly he added. âIf I was prolific and had as many followers as Rihanna, I would have the whole Mitch Schneider Organization ffoading every tweet.â âI think its kind of lame to have a voice that is your own that is somebody else.â
Although Billboardâs editors did a fantastic job in the closing comments of the event, Sponsor John Frankenheimer, Partner & Chairman Emeritus, Loeb & Loeb LLP. Said it best at the beginning of Day 1; âThere is a symbiotic relationship between digital and music and they stand to profit from each other if they work togetherâ.
This event coverage is by Kat Drucker, Strategic Consultant for Canadian Music Week and Digital Media Summit (@kitkat5656)